IRS Direct File Expands to Millions More Taxpayers – Technologist

Millions more Americans will be able to file their taxes for free with the Internal Revenue Service (IRS) in 2025.

In a recent news release, the IRS says it will roll out its pilot program, Direct File, to Americans in 12 additional states. Additionally, they will enhance the program by catering to a wider range of tax situations.

IRS Direct File Expands: 4 Things To Know

In this article, we’ll break down the changes the IRS is making for the 2025 tax-filing season and provide a more in-depth explanation of the Direct File program.

1. What Is Direct File?

Direct File is an online tax tool that allows you to file your federal tax return electronically. Unlike IRS Free File, which lets you file your taxes via third-party software, Direct File allows you to file directly with the IRS. 

The program consists of a step-by-step series of questions that you can access and answer through your phone, tablet, laptop or desktop computer and it even has a live chat feature in English and Spanish.

Once your federal taxes are done, the tool will also steer taxpayers to complete their state tax returns through their respective state websites as well. 

Check out our extensive guide on IRS Free File.

2. How Is Access To IRS Direct File Expanding?

The IRS’s Direct File service, which originally was open to more than 140,000 residents in 12 states, is now becoming accessible to residents in 12 more states, so that’s 24 total, just about half the country.

“Direct File is an important component of a stronger, more comprehensive tax system that gives taxpayers electronic filing options that best suit their needs,” IRS Commissioner Danny Werfel says in the news release. “It is a critical tool in the IRS’ effort to meet taxpayers where they are, give them options to interact with us in ways that work for them and help them meet their tax obligations as easily and quickly as possible.”

3. What States Will Be Eligible To Use IRS Direct File in 2025?

The IRS makes it clear that although 12 more states are eligible for Direct File, “Additional states could still join Direct File in 2025, and several states have expressed interest or announced that they will participate in Direct File in 2026.”

As of October 2024, Direct File is set to add the following 12 states for 2025:

• Alaska
• Connecticut
• Idaho
• Kansas
• Maine
• Maryland
• New Jersey
• New Mexico
• North Carolina
• Oregon
• Pennsylvania
• Wisconsin

As a reminder, these states are in addition to the states that were in the pilot program in 2024:

Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington State and Wyoming.

4. What New Services Will Be Included With IRS Direct File?

In addition to doubling in size, IRS Direct File will expand to include “a wider range of tax situations, greatly expanding the number of taxpayers eligible to use the free e-filing service,” the agency says in the news release.

Here are some key additions to the Direct File program you can expect in 2025:

• 1099s for interest income greater than $1,500
• Retirement income and the 1099 for Alaska residents reporting the Alaska Permanent Fund dividend
• Deductions for Health Savings Accounts
• Child and Dependent Care Credit
• Premium Tax Credit
• Credit for the Elderly and Disabled
• Retirement Savings Contribution Credits

Money expert Clark Howard says as the program continues to improve, Direct File will become more attractive to the average taxpayer.

“In my belief, many people will want to do Direct File and eliminate the many hassles and fees involved in filing taxes each year,” he said.

Final Thoughts

Direct File will begin accepting tax returns when the 2025 filing season opens, according to the IRS. The agency says it’s fast, free and totally optional.

When the program was introduced a year ago, Clark said on his Podcast that Direct File at the time was for those with “simple, streamlined returns.”

With the added features, Direct File may well suit your tax purposes for 2025. Before you commit to this optional program, make sure you look at the deductions and support offered by Direct File for your specific tax situation.

Want more tax help? Read our in-depth guide on free tax-filing services.

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